The US stock market plunged in Monday trade, following up its heavy losses on Friday.
The Dow closed down 4.5%, or almost 1200 points, while the broader S&P 500 was down 4.3% or over 110 points. The tech-heavy Nasdaq was also crushed, finishing down 264 points or 3.91%. Only two stocks in the S&P500 finished higher for the day.
ASX futures were down 158 points, or 2.65%, according to data from investing.com, pointing to a likely savage sell-off spilling into trade in Australia.
Bond yields fell as investors bought the safer assets, in a reversal of the price action last week, when surging bond yields on Friday triggered the initial sell-off on Wall Street.
“Suddenly, inflation has become one of the most-talked about issues in markets, reviving many late-cycle concerns over Fed tightening, corporate margins, volatility, stock/bond correlations and hedging strategies versus asset allocation,” JPMorgan strategist John Normand wrote in a note to clients Monday.
Wells Fargo was the biggest losing stock in the S&P 500 on Monday. Shares of the bank fell 9.93% to $57.71 after the Federal Reserve barred the bank from growing any larger until it improves its compliance and governance policies.
ExxonMobil saw the biggest drop in the Dow, down more than 6%.
The White House downplayed the severity of the selloff. White House Deputy Press Secretary Raj Shah told reporters “markets do fluctuate” and “the fundamentals of this economy are very strong.”
Here’s a chart showing the Dow Jones Industrial Average during the Wall St trading session.
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The Business Insider team has been hard at work analyzing the recent downturn in the markets. Here are some of the best stories explaining why the markets are in decline …
- Hedge funds are making an unprecedented bet that’s signaling more stock market pain. Some of the market’s most influential investors are making an unprecedented bet that near-term bond yields will climb — and that could continue heaping pressure upon stock traders.
- The global stock bloodbath has nervous traders doing something not seen since the presidential election. For much of the stock market‘s blistering bull market run, investors have stayed remarkably calm, with measures of fear locked near historical lows.
- Bitcoin dives below $7,000 for the first time since November 15. The cryptocurrency is down nearly 64% since hitting an all-time high above $19,000 in December.
- Stocks are reeling over something most people were hoping for. Driving the selloff are fears of a potential surprise in inflation following US tax cuts and signs of firmer wage growth in Friday’s jobs report.